Topic: compensation

The Top 10 Mistakes in Partner Retirement Plans

Is your firm guilty of any of these? By Marc Rosenberg Retirements & Buyouts Mistakes abound in partner retirement plans. Here are the top 10 we see: MORE ON RETIREMENT: Are Partner Buyout Plans Just Ponzi Schemes? | 20 New, Essential Keys for Today’s Partner Retirement Plans | Clawback and How to Handle It | Can Partners Compete After They Leave? | How to Juggle Tax Considerations for Partner Retirement Benefits | Retirement Plan Funding? What Funding? | Vesting Can Cover Part-Timers, Too

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Are Partner Buyout Plans Just Ponzi Schemes?

Apply this test to your firm’s succession plan. By Marc Rosenberg Retirements & Buyouts Most multi-partner CPA firms have partner buyout plans that enable partners who leave the firm via retirement, death, disability or withdrawal to redeem their share of the firm’s value. MORE ON BUYOUTS: 20 New, Essential Keys for Today’s Partner Retirement Plans | Clawback and How to Handle It | Can Partners Compete After They Leave? | Retirement Plan Funding? What Funding? | Why You’ll Get Less from Your Partners in a Buyout than You Might by Selling the Whole Firm | Partners May Balk at Guaranteeing Retirement Obligations Over the last 10-20 years, retirement plans have come under more scrutiny as younger partners question whether departing partners […]

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20 New, Essential Keys for Today’s Partner Retirement Plans

A lot is changing fast. Here’s what your partner agreement needs today. By Marc Rosenberg Retirements & Buyouts Let’s take a moment to simply summarize the many critical aspects of a well written partner retirement/buyout plan. At first glance, those unfamiliar with how a proper plan should be written may find the 20-plus key provisions listed below to be daunting. But I would caution against such thinking.  In my 20 years of consulting to CPA firms in this area, I have been asked to resolve messy disputes regarding every item listed below. MORE ON RETIREMENT: Clawback and How to Handle It | Can Partners Compete After They Leave? | Disability Is Far More Complex Than Death | Even Partner Agreements […]

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Clawback and How to Handle It

Five-year adjustments may ease partners’ minds. By Marc Rosenberg Retirements & Buyouts Some firms struggle to agree on the details of a partner retirement plan. MORE ON RETIREMENT: Can Partners Compete After They Leave? | Disability Is Far More Complex Than Death | How to Juggle Tax Considerations for Partner Retirement Benefits | Mandatory Retirement? 4 Reasons The Firm Comes First | You Want Goodwill Payments? Give Proper Retirement Notice | Vesting Can Cover Part-Timers, Too | Why You’ll Get Less from Your Partners in a Buyout than You Might by Selling the Whole Firm | The Multiple of Compensation Method, Fully Explained One of the biggest items of contention is the valuation of their goodwill for internal retirement purposes. In […]

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Disability Is Far More Complex Than Death

The willingness to return to work may outstrip ability; then what? By Marc Rosenberg Retirements & Buyouts You’ve probably heard the saying “Disability is worse than death.” The point is that both death and disability are horrendous, catastrophic events. MORE ON BUYOUTS: Even Partner Agreements Must Face Death | 6 Ways to Leave a CPA Firm (Retirement’s Just 1) | How to Juggle Tax Considerations for Partner Retirement Benefits | Two Ways to Retire, and One’s Not Pretty | Mandatory Retirement Varies by Firm Size | Mandatory Retirement? 4 Reasons The Firm Comes First | How to Transition Clients from Retiring Partners | You Want Goodwill Payments? Give Proper Retirement Notice | Retirement Plan Funding? What Funding? | Retirement Vesting: The […]

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Even Partner Agreements Must Face Death

5 life insurance questions you should consider. By Marc Rosenberg Retirements & Buyouts Issues related to the death of a partner should be addressed in the firm’s partner agreement. Consider the following: Does the firm wish to accelerate vesting in any manner? Does the firm wish to accelerate the payment frequency, vesting or both? Partners are often tempted to be generous out of sympathy for the deceased partner’s family. What stops them from acting on this generosity impulse is the cold reality of how expensive this is. As a result, most firms treat death the same as an ordinary retirement. What must be done to assign the deceased partner’s clients to other firm members and to retain the clients? To […]

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6 Ways to Leave a CPA Firm (Retirement’s Just 1)

Goodwill depends on the method of departure. By Marc Rosenberg Retirements & Buyouts In the literal sense, retirement is only one of six ways that partners may separate from their firm. MORE ON RETIREMENT: How to Juggle Tax Considerations for Partner Retirement Benefits | How to Transition Clients from Retiring Partners | You Want Goodwill Payments? Give Proper Retirement Notice | Retirement Vesting: The Devil’s In the Details | Compromise Is In Order for Some Goodwill Payouts | Three Ways to Calculate Goodwill Payable in Partner Buyouts, None of Them Great | 5 Points to Consider When Paying Out Goodwill | How to Set Terms and Limits for Goodwill Payouts | 4 Ways to Decide How to Pay Out Capital | […]

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How to Juggle Tax Considerations for Partner Retirement Benefits

Minimizing self-employment taxes is desirable but tricky. By Marc Rosenberg Retirements & Buyouts The income tax aspect of practice management issues is an area of my consulting practice in which I have knowledge, but I wouldn’t call it “expertise.” So I sought the counsel of an expert – Jeff Arnol, CPA, Managing Partner of Kessler, Orlean, Silver & Company in Chicago. The information presented here is based on my 20+ years of experience of working with CPA firms on partner retirement plans, liberally supplemented by Arnol’s input. MORE ON PARTNER RETIREMENTS: Two Ways to Retire, and One’s Not Pretty | Mandatory Retirement Varies by Firm Size | Mandatory Retirement? 4 Reasons The Firm Comes First | How to Transition Clients from […]

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Two Ways to Retire, and One’s Not Pretty

The graceful way to slow down and phase out. By Marc Rosenberg Retirements & Buyouts There are two ways that partners slow down as they approach traditional retirement age: Announced – the “cooperative” way to slow down. The partner openly and willingly informs the partners that she wishes to slow down. This change in status is usually related to the retirement process, but some partners who are not retirement-minded may wish to work less than full time in order to pursue other life goals. MORE ON RETIREMENT: Mandatory Retirement Varies by Firm Size | How to Transition Clients from Retiring Partners | Retirement Plan Funding? What Funding? | Retirement Vesting: The Devil’s In the Details | When Retiring Partners Take a […]

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